Good day and thank you for standing by. Welcome to the EC APA update conference call following on from today's press release. At this time, all participants are in a listen-only mode. After the speaker presentation, there'll be a question-and-answer session. To ask a question during the session, you'll need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require assistance during the conference, please press star zero. I'd now like to hand the conference over to your speaker today, Thomas Lingelbach. Please go ahead.
Thank you. Good day, everyone. Well, I mean, you have all seen the news. Actually, we have two news this morning. First one, the emergency use authorization in the Emirates, U.A.E., but of course, the material one that we have received notice of the European Commission's intent to terminate the COVID-19 vaccine purchase agreement, the so-called APA. Of course, the EC decision is regrettable, especially since we believe in the value of the product that we have developed thus far, the only European-developed and European-manufactured inactivated whole virus vaccine, and in the meantime, got approvals as I said, by MHRA, by the Bahrain regulatory agency and now since today also or since Friday also from the U.A.E.
Yeah, the situation is a situation that got triggered by the fact that we had not received a marketing authorization from the EMA by April 30th. This notice, as it stands right now, triggers actually a remediation phase. We have 30 days from May 13th, so last Friday, to obtain either a marketing authorization or to propose an acceptable remediation plan. This brings us to the status of the regulatory process with EMA. I think it's important that we all understand where we are from a process perspective. The company announced on April 25th that it has received a further list of questions from CHMP.
We submitted our responses on May 2nd, and we believe at this point in time that what we submitted adequately addresses the remaining objections and questions. Of course, if the CHMP accepts our responses, we are still expecting to receive a positive CHMP opinion at the latest in June 2022. Yeah, with that, I think it is important to reiterate that we will of course now very actively engage with the member states, especially with the member states who are very willing to still receive our product, with the member states who have clearly articulated that they are looking for a more traditional vaccine solution.
Basically this process is a process that we are now very actively pursuing while we are working on different remedial actions and the remediation plan that we expect to discuss with the European Commission. I think this is the situation where we stand, and of course, we have set up this call to allow questions from you, our analysts and key shareholders. I think with that, the entire management board, who's on the call today will be very happy to address your questions. I would like to hand back to the operator to take your questions.
Thank you. We will now begin the question-and-answer session. As a reminder, to ask a question, you'll need to press star one on your telephone. To withdraw your question, please press the hash key. Your first question comes from Maury Raycroft from Jefferies. Please ask your question.
Hi. Thank you for taking my questions. Maybe just to start off, if you can talk more about what remediation plans with the EC or individual member states could look like, and what's the likelihood of a new plan with EC getting accepted?
Maury, of course, we cannot talk about the details of a remediation plan because at this point in time, the details of any kind of remediation plan are not clearly specified. But what is very clear is that we will work with the EC and more importantly, with the EC member states who participated in the APA to agree on a plan. Yes, we have not received positive CHMP opinion in April, but at the same time, we are well advanced, and as I mentioned earlier. We really hope to get a positive CHMP opinion latest by the June meeting.
That's basically the basis of what we're gonna discuss, on the one hand side, you know, by when will we have which product available, how could the product, you know, play a benefit in the forthcoming, you know, vaccination strategies in the individual countries in response to their different requests and the regulatory timeline. Those are the key elements, of course.
Got it. That makes sense. Are there specific member states that you're having more advanced conversations with? I guess, can you talk a little bit more about how you think about EC versus individual countries at this point?
Yeah, we have an ongoing dialogue, and of course, there are a few member states who have specifically addressed already questions to us and interest to us. Among those, we have also very big European countries.
Okay. Okay, can you provide a status update on marketing authorization applications outside of the E.U., including to the WHO? Are any of this contingent on getting EMA authorization first?
Another excellent question. First one is the WHO prequalification process can formally be triggered on the back of either an MHRA approval and/or EMA approval. With the MHRA approval received, we have initiated now the preparatory work for the WHO prequalification process. Therefore, we don't need to wait for the E.U. or for the EMA approval in order to get going on the WHO prequalification. You can also see that, with the announcement that we made this morning around U.A.E. Emergency use authorization, that we are focusing a lot on additional countries that will hopefully provide us with regulatory approval.
These are countries outside of Europe and, but still important countries where, our vaccine, in its current form or future variants thereof, could play a major role in the fight against the ongoing pandemic, and as the pandemic is transitioning more and more into potentially an endemic phase.
Got it. That makes sense. For the questions with CHMP, this is the last question from me. You mentioned that you believe they're adequately addressed. Is there anything additional about those questions that they are saying at this point? I guess any more specifics that you're providing?
No. Not more than what we provided last time already.
Okay, thanks for taking my questions. I'll hop back in the queue.
Thank you.
Thank you. Your next question comes from Simon Scholes. Please ask your question.
Yes. Hello. Thank you for taking my question. So my understanding is that a positive opinion from the CHMP can only come pursuant to one of the CHMP meetings. I think a CHMP meeting has started today and lasts until Thursday. The next one starts on June 20th, which would obviously be beyond the 30-day period that you've mentioned in the press release. I mean, my question is, I mean, are there any chances of a positive opinion pursuant to the current meeting?
First of all, we cannot talk about what the CHMP may or may not discuss in its current CHMP meeting. The agenda got published this morning, as some of you know. You know whether, you know, as part of the standard review processes, also VLA2001 will be discussed or not is not accessible out of the published agenda. At this point in time, we have to assume that we are getting at latest into the June CHMP, which is also why we've provided the guidance accordingly.
I mean the June meeting, I mean, you do say that, based on the terms of the APA, you've got 30 days from May 13 th. The meeting that starts on June 20th would be too late, presumably.
Yeah. I mean, as we clearly articulated at the beginning, and as I said earlier, based on the terms of the APA, Valneva has 30 days from May 13th either to obtain a marketing authorization or to propose an acceptable remediation plan.
Okay. True, yes.
I think that's why we have been focusing earlier in describing also, you know, the remediation plan route.
Okay, understood. Thanks very much.
More than welcome.
Thank you. Your next question comes from Samir Devani of Rx Securities. Please ask your question.
Hi, everyone. Hi, Thomas. Thanks for doing the call today. I guess I've got three questions. Just on the U.A.E. authorization today. I was just wondering, mind saying that territory is heavily vaccinated already, I think 99% plus.
Mm-hmm.
What sort of commercial opportunity do you actually see there? I guess that's the first question. Then maybe just a couple on the financials. Obviously you've got an inventory level that's quite, I think it, in the Q1 was EUR 137 million. Could you just help us understand how much I appreciate a lot of that must be the VLA2001. But if you could just maybe talk a little bit about that inventory level. Then, in light of, you know, the outcome that you don't get any significant E.U. orders, can you perhaps just give us a bit of help on your cash runway? Thanks very much.
Yeah. Hi, Samir. You have a very good questions, of course, as usual. Let me start, let me take the first one, and I will probably hand over to Peter to take the second and the third question. On the commercial opportunity, yes, you are right. U.A.E. is a country with very high vaccination rate, but it's also a country that has a high vaccination rate with another inactivated vaccine. So not only mRNA, for example, and they. It's also a country that is currently preparing itself for its next, let's say, for the next fall and season, and for a next you know potential wave.
This is the reason for why we have you know active dialogue with U.A.E. This is the reason for why they have granted us emergency use authorization. We are currently in the process of you know discussing you know real you know I would say demand and more importantly more how our product could add value into these different vaccination programs. We clearly see a place there for VLA2001. It's too early to specify you know the business size. You know will it be another you know Bahrain size of thing or will it be substantially bigger? This is something that our team under the leadership of Frank is currently working on. Peter inventory and.
Yes, thank you, Thomas. Please, Samir. Sorry, go on, Samir.
Sorry, if you missed the question, Peter. I was just asking about the.
No, I mean.
inventory levels.
No, no, I thought you had a follow-up question to Thomas. I'm fine.
No.
Yeah. On inventory, yes, you're right. We of course do have quite a bit of inventory that relates to VLA2001. As we said, we are in discussion with the EC and with its member states on first of all, the upfront, but also on orders in general. This is why I think it's too early to draw any conclusion with regards to our inventory and what we'll do with it. We still assume that we will be able to place orders to use our inventory. We will, as we said, once we have more clarity on the upfront, on the CHMP process, we will of course look at our financial guidance for the year.
With regards to cash reach, you know, as we said, we do. From the way we look at the agreement and, you know, the commitments we made, we will not have to reimburse the prepayments that we received from the EC member states. As such, we do not expect to run into any immediate cash constraints, but we'll of course continue to carefully monitor our cash situation. As you probably saw at the end of March, we still had a very solid cash situation of more than EUR 300 million.
Okay. That's very helpful. Peter Bühler, a couple of follow-ups on that. Was there any significant revenue received from the EC in Q2 so far? Then also, is the Deerfield OrbiMed financing facility contingent on EC orders, or is it just purely on European approval? Thanks.
Yes. I mean, you will appreciate that we have, of course, not published any numbers with regards to Q2. The way the contract worked is there were prepayments which we, to the largest extent, received in December, and then the remainder of the payments will be due when we supply the first products to European member states. With regards to Deerfield and OrbiMed, the first EUR 20 million tranche was available immediately and we have drawn down on that one in April. The second tranche of EUR 20 million is contingent on EMA approval.
Okay. That's very helpful. Thanks very much.
You're welcome.
Thank you. Your next question comes from the line of Damien Choplain from Oddo BHF. Please ask your question.
Yes, hello. Thank you for taking my questions. I've got two. First, does the EC provide any reason explaining their intent to terminate the contract? And second, do you have maybe advance discussions with other countries outside Europe that could let's say compensate the contracts with EC? And maybe last question. How much do you already receive from the EC Commission? Thank you.
Okay. Hi, Damien. First of all, no, we have not received any other reason than what we have disclosed, of course. The only reason that was provided at this point in time was the fact that according to the agreement, EC has the right to provide the notice, if the CHMP or positive opinion sought the approval not achieved prior to thirtieth of April. That's all we can say at this point in time. We have not received any further, you know, information.
As we said, and I would like to reiterate that, you know, we have now 30 days to either obtain a marketing authorization or post an acceptable remediation plan, which means that we have this 30-day cooling-off period, and we will work with EC as well as the member states to maintain order to a, to the largest extent possible. Now with regards to your question about, you know, countries outside of Europe, I mean, you're seeing that we are constantly discussing and building up, you know, relationship with key countries in parentheses such as high-priority countries outside of Europe. Again, as mentioned this morning also with the EUA emergency use authorization.
also the fact that we are now, you know, going the route of WHO prequalification will allow, you know, our product to be used in countries outside of Europe. We are, you know, very active in this process right now. We have, of course, prioritized E.U., and we are still prioritizing E.U. at this point in time because we still believe that there will be a substantial demand for Valneva's VLA2001 within Europe. and that of course is dependent on each other. and that's basically where we are at this point in time.
Okay. Thank you.
Thank you. Your next question comes from the line of Keyur Parekh from Goldman Sachs. Please ask your question.
Hi, good afternoon. Two questions, please, if I may. The first one is, would love to hear your thoughts on what is driving your confidence that you've addressed the queries asked by the CHMP adequately, and you are confident that whenever the CHMP reviews your responses to the additional questions, you are likely to get an approval. That's kind of question number one. Secondly, just kind of, get a better sense for, what were the type of questions that the CHMP had asked you, were they related to manufacturing, were they related to clinical data, were they related to your analysis of certain data sets? Any color you might be able to provide there would be helpful. Thank you.
Okay, good. So basically, let's talk a little bit. I think the two questions that you raised are in a way interconnected, right? I mean, we have gone through a significant round of list of questions. Of course, we have submitted the same file to both MHRA as well as E.U., which on the basis of a pivotal trial design that was pre-agreed with both authorities up front. Of course, the two authorities have taken a different stand on some additional, you know, pieces of information that they were looking to see.
We have discussed during the last analyst call already that one example was that you know we have not for all sub-analysis and additional data analysis provided both binding as well as neutralizing antibody titer data because they highly correlate. I think that was for example one thing acceptable to one authority and not necessarily acceptable to the other. We had also an ongoing CMC discussion in connection with you know release specifications. I mean this is of course you know also something that has gone back and forth. This is just to give you a flavor and I'm referring to things that we have already said during the last call. This also tells you a little bit where our confidence comes from.
We have submitted our responses as we wrote in the press release on May second. Based on our understanding with regards to CHMP's expectations and based on where we are in the process, yes, we are confident. Of course, you know, we cannot say more at this point in time because we don't know formally more than what we are just currently stating.
Perhaps I could just have a follow-up there. Can you give us a sense for how much money you already received from the EC?
This EC money question is disclosed. The EC ordered 24.3 million doses for 2022 supplies. It is disclosed that there is a 30% prepayment.
Thank you very much.
Thank you. Once again, if you'd like to ask a question, please press star one on your telephone. Your next question comes from Seamus Fernandez of Guggenheim Securities. Please ask your question.
Hi, this is Evan Wang in for Seamus. First, on the APA discussions, can you help provide some context on, you know, the EC's key talking points in that dialogue? You know, was it more pricing, the number of doses, the need? Thanks.
I would say probably a combination of various things, but we would rather prefer not to give additional color at this point in time on that very topic, as you can, of course, appreciate.
Got it. With the latest round of the CHMP questions, you know, I noticed there was, in addition to the required data, they're required for justification for authorization. You know, can you help us understand what that the scope of the justification, what that means, and does today's decision impact your confidence in obtaining authorization in Europe?
Yeah, you know, we have alluded to that point in one of our previous disclosures and in the different regulatory updates. As you know, we are currently assuming a conditional marketing authorization, so there needs to be, of course, a justification for the conditional marketing authorization. All that is specified in the respective guidelines. We do believe that we have the necessary grounds to claim the conditional marketing authorization being justified. That's what we have submitted, and at this point in time, we have not received any objection against this justification.
Thanks. I had one more question. You know, with the approvals in Bahrain and the U.A.E., can you talk about the process for supplementing those approvals with booster authorizations? You know, what kind of trials are remaining or what are the steps there? In addition, with the WHO.
Yeah, very good question. First of all, you know that we have two sets of important data that we are currently in the process of generating. One is the homologous and partial heterologous follow-up data from our pivotal 301 study. You know that we have boosted people who received in the main pivotal 301 study either for priming AstraZeneca two priming doses or VLA2001. All of them got as a third dose now VLA2001. This will be the first data set, and we expect this data in quarter three. This will be the first data set that will show, you know, homologous.
Especially for the countries that we are discussing, homologous is also important because you see there are many, many people who have been primed with the Chinese vaccines, for example. But we will also see for the first time the mix and match booster effect against AstraZeneca in a real-world, real-life setting, meaning with people who were in need of a booster, you know, six, eight months post-priming. That's the first data set that will be important. The second data set that will be important is the data set from the study that we have initiated and that we announced, which we call the heterologous VLA2001-307 study. This is a study where we are specifically targeting people who have been mRNA primed, plus/minus naturally infected or only naturally infected.
Really testing in different cohorts you know how our vaccine adds value in those real-life settings. This is also a data set that we expect in quarter three. All in all, we have triggered those studies also to ensure that we have data that will allow the vaccination recommendation bodies to take respective decisions prior to the fall/winter vaccination campaigns.
Great. Thank you.
As a final reminder, if you wish to ask a question, please press star one on your telephone. Your next question comes from the line of Arsène Guéguen from Kepler Cheuvreux. Please ask your question.
Hello, gentlemen. Thank you for taking my question. Two question, if I may. First of all, a quick one. I don't understand the amount that you already received from the European Commission. If you can repeat it could be great. The second one is, we know that the European Commission and the EMA are independent. However, European Commission has a lot of unused vaccine currently. So again, this is backdrop. Do you really think that EMA would give you an approval before the deadline? Maybe a following question. What could be the volume of supply we can expect following your discussion with the different member states? Thank you.
We said at the beginning that under the advance purchase agreement, and when you look at what we have received, we are talking roughly about a 30% prepayment. Then the second point is on the EC and EMA independence and in relation to that, also the supply topic. First of all, regulatory authorities have to be independent, and regulatory authorities have to not be influenced by, you know, the commercial, you know, environment, contractual situation, and so on and so forth. You know, in a way, you can see this with MHRA in the UK, right? I mean, also the UK government terminated the contract. MHRA still approved the product.
In a way, we see this really at this point in time being independent, and we have no sign whatsoever at this point in time that there is not the absolute integrity by the regulatory authorities being maintained. With regards to supply volumes, we have not at this point in time or we don't feel comfortable at this point in time since we have initiated the discussion to talk about quantities at this point in time. It would just not be helpful in the overall process.
Okay. Thank you.
I have no further questions showing. I'd like to pass back to the speakers for any closing comments. Thank you.
Yes. Thank you, so much for your time today. We thought that it would be helpful to address your questions collectively in such a setting, and I think your questions clearly indicated to us that there was a need for this call. I mean, bottom line one more time, reiterating the company's position. We believe that we have a highly differentiated vaccine approach. We believe that this vaccine can still, you know, play a role, a very nice complementary role in the fight against the ongoing pandemic, but also, as a basis and as a platform for the future, you know, endemic phases.
As such, we continue working very, very hard to position the vaccine and especially working with those you know member states who would like to see this vaccine in their portfolio. With that, it is very clear that we will try everything to come to an agreement with the EC on an acceptable remediation plan while we continue focusing on the process with EMA and CHMP to get approval later in the June meeting. With that, thank you so much again, and we keep you posted. We keep you updated. Feel free to contact us if needed. I still wish you a good remaining day. Goodbye.
That concludes our conference for today. Thank you for participating. You may now disconnect.